THE BLOG

When Culture Becomes a Strategy for Growth

01/29/2016 11:56 am ET

"Strategies are nothing but a guessing game for a future reality we impossibly can predict. Culture eats strategy for breakfast. With the right kind of culture, we can handle anything" my new boss told me.

A Company with Culture as Strategy.
The year was 2002; I had just been hired as Chief Cultural Officer for a fast growing IT-company. My job description was to "look after the corporate soul". I think I fell in love with the company even before I started.

On my first day I was given the welcome-talk by one of the founders. "Culture is everything," he said. "It is who we are, what we believe in and how we work together to get shit done." He was a man of colorful language. "When we fundamentally believe in the same things, agree to do everything we can to make it happen and have a whole lot of fun doing it, great results will follow."

He was right.

In the next eight years, the company grew from a smallish start-up to a global industry leader, from 300 employees in 12 countries to 1800 in 50 countries. My job as its CCO was to make sure that, while experiencing a tremendous growth, we stayed true to our corporate soul, values, attitudes and greater purpose - and had lots of fun along the way!

Even as we grew rapidly and changed in size and shape, our "cultural personality" remained intact and people around us began to take notice. We were known for our positive energy, enthusiasm and passion, and our value "Fun and Profit" inspired us to have - and deliver - on both. "Whatever you guys are on," visitors at our HQ often said, "We'd like to have some too."

For 3 consecutive years we were awarded "Best Place to Work", won a number of innovation-prizes, became a global market leader in our industry - and delivered an average of 35% revenue growth year after year. And in 2010, we were acquired for $3.3 billion USD. Not bad for a Norwegian start up.

Culture; a Business Essential.
Show me a leader who ignores her company culture, and I will show you a leader who is about to get a wakeup call.

An overwhelming amount of research show the effect strong and engaged cultures have on bottom line results. In his book The Culture Cycle: How to Shape the Unseen Force that Transforms Performance, HBS Professor Heskett writes: "Organization culture is not a soft concept. Its impact on profit can be measured and quantified. As much as half of the difference in operating profit between organizations can be attributed to effective cultures."

Deloitte University Press has published a culture- and engagement report stating that engagement and right corporate culture improve execution, retention, and financial performance.

And according to a culture survey conducted by Katzenbach Center, 84% of the executives said culture was critical to their business success. Yet only 55% thought their own cultures were managed effectively.

Every company has a culture. But only a few leaders are conscious enough to make it their strategy for growth.

"Culture is one of the most underappreciated essentials in business", Sir Richard Branson, founder of the highly innovative and successful Virgin brand enthusiastically says. "No matter how visionary, brilliant and far-reaching a leader's strategy might be; it can all come undone if it is not fully supported by a strong and spirited corporate culture." He clearly has understood it.

What Culture Is.
Many other business leaders, however, have not - and disregard culture as something vague, soft and insignificant. It is anything but.

Culture is a company's norms, rituals, actions and behaviors, shaped by individual and collective values and attitudes - and the priorities of their leaders. It influences how people feel, determines how things are done, and shapes how people behave, internally as well as externally.

Culture is the glue that binds the organization together, the blood that runs through its veins, the heart and soul of the company - and the code no competitor is able to copy.

"Culture is something we can start working on when business gets better," I've heard leaders say. To me that makes as much sense as creating the foundation of a house after it is built, or giving the flower water only if it blossoms. But most of all; it reveals that many leaders still haven't understood what is at stake here.

A New Way of Leading.
We are just on the brink of a new era, recently named "The 4th Industrial Revolution" by World Economic Forum. This era is characterized by a fusion of technologies, blurring the lines between the physical, digital, and biological spheres - and expected to lead to radical changes in how we live, work and relate to one another.

Simultaneously, business leaders around the world are waking up to realities of "automation" and "digital transformation" - expected to lead to radical changes in how companies organize, how teams operate, and how leaders lead them.

To keep up with the rapid changes and a business landscape in constant flux, traditional command and control management styles are increasingly being replaced by more engaging and empowering leadership principles and hierarchical decision-processes are replaced by bottoms-up and sideways decision-making.

And with this, a new kind of leadership is emerging, with "enlightened" leaders who understand that engaged and empowered teams and effective and inspired cultures are not a "nice to have" - but a "need to have".

These leaders are reshaping organizations and how business is done, they are making culture their strategy and they are creating a corporate spring. And we need many more of them!

What Great Culture Leaders Do.
So what is it they do, these "enlightened" 21st century leaders?

Having worked closely with hundreds of leaders over the last 15 years, I have seen a clear pattern of what Great Culture Leaders do.

1. They Own It - Great Culture Leaders know that their company culture matters, that it is their responsibility and consider it an important part of their job. They don't outsource it to anyone else in the team but personally engage with the topic and encourage others to do the same.

2. They Define It - Great Culture Leaders develop strong identities; values, attitudes and culture norms, in support of their purpose, vision and strategies. They involve and include their people in it, tell stories and create "mantras" to make it memorable, engaging and inspiring.

3. They Communicate It - Great Culture Leaders talk about what their culture is and why it matters - and discuss it with their employees, customers and business partners. They are curious to understand how people feel about it, that it is real, lived and experienced by all its stakeholders.

4. They Integrate It - Great Culture Leaders don't see culture as a stand-alone thing but as a way to conduct their business. By making their values and culture norms central in operational, tactical and strategic choices, culture becomes an integral part of how they do things.

5. They Live It - Great Culture Leaders live, breathe and are the culture. They know they are role models and that how they act, speak and behave fundamentally influence the culture. By being authentic and making conscious choices in support of their cultural identity, they inspire others to be and do the same.

Great Culture Leaders know the choice is theirs; taking ownership for shaping the culture - or letting it happen by accident, making culture their greatest asset - or risking it becoming its biggest liability, creating an environment where eyes shine and business thrive - or just continuing doing business as usual, hoping it somehow will work out.

Great Culture Leaders know that shaping culture takes an effort and is a never-ending process but that the upside of a strong, positive and inspired culture are far greater than any effort required from them.

Culture may eat strategy for breakfast, but Great Culture Leaders know that when culture and strategy have breakfast together - even greater things will follow.

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